Friday, 30 June 2017

The
Tories have been criticised for seeking a so-called ‘hard’ Brexit, but in
fairness to them, I don’t really believe that there is any other sort. The logic of withdrawal from the EU also
implies withdrawal from both the single market and the customs union, and those
who are arguing otherwise are being less than honest with the public. Insofar as people thought that they were
voting against immigration and foreign control over laws and regulations, and for ending payment to the EU, the Tory position is entirely consistent with the
outcome of the referendum. To the extent
that it looks inconsistent with the claims of the Brexiteers during the
referendum campaign, it is because those campaigners were telling outright lies
when they said that the UK could enjoy all the benefits with none of the costs.

I
know that, in theory at least, it is possible to retain membership of both the
single market and the customs union whilst being outside the formal EU
structures, which is roughly the position in which Norway finds itself. The problem with that position in relation to
the perceived reasons for the referendum outcome is that it implies acceptance
of freedom of movement, acceptance of the jurisdiction of the ECJ, and the
payment of a share of the costs of running and regulating the market. The Tories have set themselves against all
three of those, and Labour have also set themselves against the first whilst
remaining at best ambiguous, to date, about the other two. And yesterday, Labour reinforced their
commitment to leaving the single market.

In
that context, Labour’s repeated call for getting the “exact
same benefits” as membership of the single market is nonsensical, and they know
it. They’re no better than the Tories in
this instance – just as the whole referendum was about trying to bridge the
divide within the Tory party so Labour’s call is about trying to bridge the
divide in the Labour Party between those who want to stay in the EU and those
who want to implement the referendum decision.
The result is that they sound as dishonest as the Brexiteers during the
referendum, in that they’re effectively saying that we can have the benefits
without the costs.

The
same statement applies to any other party which talks about some sort of ‘soft’
Brexit. Insofar as the term means
anything at all, it means continued adherence to EU rules about freedom of
movement, continued adherence to single market regulations, continued payments
to the EU, and continued compliance with the ECJ – all without any influence or
input into the rules and laws with which we must comply. So, whilst in theory this so-called ‘soft’
Brexit is a possibility – and particularly so in the light of the new
parliamentary arithmetic - in practice it requires a significant climb-down
from the position taken to date by Labour as well as a willingness amongst a
small number of Tories to rebel. There
are no signs of that happening. With no
willingness to compromise, the Labour Party’s position on Brexit is to all
intents and purposes the same as that of the Tories – demand the impossible and
then accept a complete break when they don’t get it.

Any
hope that ever existed of getting terms as good as the single market without
membership of the EU always depended on one thing and that was that the
decision of the UK to depart would be the first domino which brought the whole
house down and destroyed the EU. Had
that happened, the idea of a new trading arrangement between the states of
Europe without the elements of political union which have developed over the
years would have been a theoretical possibility, although even then I suspect
it would take decades to bring about.
But the actual effect of Brexit has been to strengthen the unity of the
other 27 members – and in that scenario, everything the Brexiteers promised is
just pie in the sky, and the UK’s position looks like the bluster and bluff
which it was from the outset. For sure,
the UK’s team might say that they want the EU to continue as a strong entity
with which we can trade, but that’s actually the reverse of what they need in
order to make sense of the hole which has been dug. They need a weak and disintegrating EU - and very
definitely not a ‘strong and stable’ one.

Rather
than aping the Tory demand for the moon to be delivered on a plate, the
rational response from Labour would be to point out the absurdity of demanding
all the benefits with none of the costs, and let the Brexiteers stew in a broth
of their own making. As consequences
become clearer, they could be highlighting the fact that the best way of
getting membership benefits of any organisation is through being a member,
instead of which they’re backing up the Brexiteers’ ludicrous claim that those
benefits are available anyway. It’s not
offering the alternative for which people will increasingly be looking as the
full consequences become obvious. Worse
still, it’s not only Labour who are failing to offer Wales that honest and
rational alternative.

Thursday, 29 June 2017

The
way in which the Tories and the DUP have cobbled together a deal to keep May in
power tells us a lot about the reality of government finances. The cost of this isn’t just the £1 billion
extra outside Barnett for Northern Ireland, it’s also the cost of abandoning
badly thought through manifesto commitments on pensions, social care, and the
winter fuel allowance. (As a former Tory
Chair put
it, had the Tories actually put before the electorate the policies which
they’ve now decided to implement, they might well have won the increased
majority which May was seeking.) The
total expenditure over and above that implied by the manifesto is probably in
excess of £20 billion. Luckily for the
Tories, they didn’t think it necessary to provide costings for their manifesto;
had they done so, it would now be obvious just how many billions adrift they
are.

That
money has to come from somewhere, of course, and some of the discussion has
talked about this being “taxpayers’ money”.
That implies that it’s coming from taxes one way or another, but that
isn’t necessarily so; it could also come from borrowing. Or the government could simply create more
money. In any event, finding a few extra
billions isn’t a problem, because there really is a magic money tree (or even two)
and the ease with which the government has agreed to find the money underlines
that fact. The obsession with reducing
the debt is, and always has been, a smokescreen with which to hide an
ideological commitment to a smaller state and an increase in wealth disparity.

The
amazing thing is that, despite demonstrating time after time that the deficit
isn’t a problem, the Tories can still make the media and other parties dance to
their tune, and demand that they say how they will reduce the debt which the
Tories are busy creating. It’s a
reflection on the quality of journalism today that they are getting away with
it.

Wednesday, 28 June 2017

The
Brexit Secretary came up with a new formulation of ‘no deal is better than a
bad deal’ this week when he said that no deal would be
better than a ‘punishment deal’. It has
a nice ring to it in terms of rhetoric, but it’s every bit as silly as the
previous formulation. And it glosses
over the fact that there will be two agreements, not one.

As
far as the second deal, the trade deal, is concerned, we already know that the worst
possible outcome is to revert to WTO rules, and that outcome is the inevitable
result of no deal. There is simply no
means by which the EU27 can offer worse terms than that; so there is no way of
‘punishing’ anyone. And we already know
that no deal which leaves the UK outside the single market (an inevitable
consequence of rejecting freedom of movement and the jurisdiction of the ECJ)
can never be as good as membership of the EU.
So any agreement will be better than WTO terms but worse than current
terms; ‘no deal’ cannot be better than even the worst negotiated deal.

But
prior to that trade deal, the first deal – and the one that has to be largely
agreed as a precursor to any trade deal – is about the terms of exit. There will be many elements to this, but the
only one that offers any scope for meting out anything resembling ‘punishment’
is the agreement over the amount to be paid by the UK to the EU. This has regularly – and wrongly – been
presented as though it were some sort of ‘exit bill’. It is not; it is a calculation of the amount
of money which is required to be paid to meet the UK’s obligations under
agreements to which it is already party.

There
is certainly plenty of scope for a difference of opinion over which elements should
be included and the number of pounds to be attached to each element, and if the
EU27 really wanted to punish the UK for daring to leave, this is where they have
the most scope for doing so. The Institute
of Economic Affairs has suggested that the total could be as low as
£26billion; rumours from within the EU suggest a number anywhere up to
£100billion.

Whether
it would be in the EU’s interests to demand an excessive sum is another
question entirely; getting something from the UK is obviously better than
seeing the UK walk away without paying anything. And it’s ‘true’ that the UK could simply walk
away and pay nothing; but it isn’t the cost-free option as which some seem to
see it. In the first place, seeking a
trade deal on better terms than the WTO terms with the EU immediately after
walking away from previously agreed commitments isn’t exactly the best way to
get them in the right frame of mind for the negotiation. And in the second place, it would seriously
harm the UK’s reputation and ability to make agreements with anyone else. Who, after all, would want to negotiate a
deal on anything with a country which thinks it can tear up a contract at will
and walk away with no consequences? Who
would trust such a country?

So,
on the specific issue of the amount to be paid, both sides have a clear interest
in coming to an agreement Threats to the
contrary by one side will be more of an obstacle than an aid in reaching that
agreement. I can’t believe that David
Davis doesn’t understand all this; his abject capitulation over his previous
suggestion that the scheduling of talks would be the ‘row of the summer’
certainly suggests that he has a better grasp of reality than his rhetoric
indicates. So why go to so much trouble,
repeatedly, to make things harder for himself by trying to raise the stakes? I wonder if he really wants a deal at the end
of the day or not; perhaps he’s just setting the scene to be able to blame
those nasty foreigners for the outcome that he really wants – an excuse to walk
away.

Tuesday, 27 June 2017

The
initial position taken by the UK Government over the future rights of EU
citizens does not bode well for the Brexit negotiating strategy. Denying rights to people who have not yet
arrived in the UK at the point of exiting the EU is one thing, but
retrospectively removing rights from people who are already here is another
thing entirely. It's a strange logic which leads the UK Government to believe that removing
rights from EU citizens is anything resembling the ‘fair and reasonable offer’
as which they are describing it, especially when the EU27 have already stated
that they want to protect all those rights currently enjoyed by UK citizens
elsewhere in the EU. Given the
importance of getting this issue right before trade talks can even start, it
seems a very curious way of trying to earn a bit of friendship.

Craig
Murray describes it well as a bit of ‘pointless cruelty’, and it has
already emerged
that it will require even those EU citizens who have applied for and obtained
residency rights to apply again for a new and lesser status. What on earth is the thinking behind this
which enables apparently intelligent people to conclude that there is anything
fair or reasonable about this?

It
strikes me that part of the issue here might well be very differing conceptions
about citizen’s rights. It is already
true that EU citizens living in the UK have more rights, in terms of bringing
family to join them for instance, than do UK citizens. And it is revealing that in drawing attention
to that apparent unfairness, the implicit assumption is that EU citizens’
rights should be curtailed rather than widening the rights of UK citizens. Indeed, in more general terms, the government
seems to have a real problem in acknowledging the whole concept of people
having ‘rights’ at all – it’s a very un-British concept. Although the term ‘citizen’ is more widely
used than it used to be, the underlying reality is that people in the UK are
subjects with obligations, rather than citizens with rights. They are two very different perspectives.

If
we start with that implicit assumption about subjects with obligations, it
becomes a lot easier to understand how the ‘offer’ which the government has
made might indeed appear to be a ‘fair and reasonable’ one; but it was never
going to appear that way to anyone who starts from the other perspective. It seems typical of May and her team that
they have no real conception or understanding of the gulf between the two perspectives,
and therefore are making no real effort to bridge it. Understanding the thinking of other parties
is key to any successful negotiation but on this issue, as on so many others,
the UK Government seems determined to insist that it’s everyone else who is out
of step.

Friday, 9 June 2017

At
one level, not a lot has changed; it is clear that we will still have a Tory
Government, which will be able to rely on the members of the DUP for support on
most issues, even without a formal agreement or coalition. Yet at another level a great deal has
changed; a Prime Minister who chose to make the election all about how strong
she was and how she needed to strengthen her hand has become a Prime Minister
who has demonstrated how weak she is and has weakened her own hand. It was a spectacular miscalculation.

In
terms of the immediate problem in hand, it does not change the fact of the Brexit
vote; there is still no majority in parliament for revisiting the decision or
allowing a second vote when the details are clear. What has changed is that there is no longer a
majority in the House of Commons for a form of Brexit which involves leaving
both the single market and the Customs Union.
Even the DUP, as I understand their position, prefer continued membership
of both whilst being outside the EU itself; and there are some members on the
Tory benches – even some strong Brexiteers - who would also prefer that
scenario, for a period at least, and who are rather less committed to the hard-line
anti-immigrant rhetoric of people like May.

However,
a preference for that outcome isn’t the same as a willingness to support the
concessions which will be necessary to achieve it. Whilst membership of the European Economic
Area can offer many of the economic benefits of membership of the EU, it would
come at a price, in terms of acceptance of EU rules, acceptance of the
authority of the ECJ, annual payments into the EU, and a willingness to accept
freedom of movement. Without compromise
on at least some of those, it’s hard to see how the parliamentary majority can
be translated into a deal.

I
find it hard to see how even May, with her recently well-demonstrated ability
to stand on her head whilst arguing that she hasn’t moved, can make any of the
necessary compromises – replacing her is probably the first prerequisite for
a change in the UK’s position to a more pragmatic stance. The good news is that her party will probably
see to that, even if not immediately.
The second prerequisite is probably for the Labour Party to drop its
insistence on an end to free movement and be a bit more open to compromise. At the moment, I’m not sure how likely that
is; they seem to have hooked themselves on an anti-immigration peg in the
belief that it was electorally necessary.

Thinking
around the alternative futures for Wales, I remain convinced that reversing
Brexit is the best option, and I remain disappointed that so few are making
that case. But continued membership of the
single market and Customs Union through the EEA would at least offer a
fast-track return to the EU at some future date – either for the UK as a whole
or for an independent Wales (and Scotland).
I can at least see a route forward for an independent Wales in that
context, which I could not see in the context of the type of Brexit being
pursued by May. However, yesterday’s
result was not enough to make me feel optimistic about such an outcome – just a
little less pessimistic.

Thursday, 8 June 2017

There
are three things which the Tories can normally be relied upon to do when a
response is needed to any question of ‘Laura Norder’. The first is to blame someone or something
else, the second is to restrict citizens’ rights, and the third is to promise
tougher penalties. And, sure enough, the
Prime Minister has rehearsed all three over the past day or two in response to
the atrocities in Manchester and London.
And they’re all as irrelevant in this case as usual.

The implied
blame in this case is a combination of incorporating human rights legislation
into UK law, and making the UK subject to ‘foreign’ courts, which actually dare
to uphold the relevant legislation. It’s
a convenient scapegoat, but it is being used to divert attention from the fact
that, as Home Secretary, Theresa May herself failed to protect the UK using the
already adequate powers which she had.
And part of the reason for that failure brings us to the second strand
of her response.

Taking
away, or reducing, citizens’ rights is always their preferred option. In general, it often seems as though they’d
really prefer it if citizens didn’t have any rights at all, and just did
whatever they were told – the surprising thing is that so many people seem to
accept that it’s a good idea, but then, they probably are assuming that it will
only affect ‘someone else’. But in many
ways, tearing up our protections against over-intrusive security services is a
way of making up for a lack of resources within those services. And that’s what ties the first and the second
strand together – the problem isn’t that someone else is to blame, nor that
human rights prevent the proper operation of the security services, it is that
the resources available to those services have been consciously and
deliberately reduced over recent years by a Home Secretary whose priority was
financial. And let’s just remind ourselves
who that Home Secretary was.

In
the case of the third strand, the response is just plain silly. The argument is that knowing that there will
be longer jail sentences for perpetrators of crime makes them less likely to
commit crime. I can see how that might
conceivably work in the case of, say, burglary, but it depends on the idea that
the burglar will sit down and do a cost-benefit analysis of the potential gain
from the burglary and the potential pain of the jail term. That seems highly unlikely to me; insofar as
our hypothetical burglar does any weighing of the pros and cons in advance, the
factor most likely to weigh in his or her mind is the probability of getting
caught. (And that, of course, brings us
straight back to the question of the level of police resources…) However, in the case of our would-be terrorist
attacker, he or she has already assumed that the outcome of the attack will be
his or her death; either through use of a suicide bomb or else by police
action. The idea that knowing that they
face a sentence of 30 years rather than 20, say, if they survive is hardly
likely to be much of a deterrent. Could
it be a deterrent to those aiding and abetting the actual attackers? That also seems unlikely to me; martyrdom is a
part of their belief system, and prison is just another form of martyrdom.

I
can’t believe that May actually believes any of what she says on these points;
it looks more like a pitch to persuade people that she’s being tough. But appearing to be tough isn’t the same as
actually being tough, nor as solving a very serious problem. It might win a few votes though, which is
what it’s really about.

Wednesday, 7 June 2017

Whatever
the result of the election, there is no question that Jeremy Corbyn has had a
much better election than most assumed would be the case at the outset.Partly, this has been because he’s been given
more air time to reveal the real man rather than the bogeyman of the right wing
media, and partly because the pressure of an election has revealed just how
flaky and incompetent his opponent is.And he’s been able to produce a manifesto which contains a series of
very popular pledges.It’s easy to
imagine how much better he might have done if the majority of his own party’s
MPs hadn’t spent most of the past two years seeking to undermine and
destabilise him at every turn.They have
a lot to answer for.

And
that brings me to the first of my doubts about both Corbyn and Labour. Just supposing for a moment that he pulls off
the electoral surprise of the century and ends up in a position in parliament
where a Labour-led government or a Labour minority government becomes a
realistic possibility. They have said
that they would put forward their manifesto proposals in the Queen’s Speech and
challenge the other parties to support or oppose them. That’s a reasonable basis for proceeding,
except for one thing: how certain could we be that his own party’s MPs would
back him? Challenging Plaid, the SNP,
the Greens, and the Lib Dems to oppose him if they dare is one thing – but what
if all those recalcitrant MPs who would prefer large chunks of the Tory
manifesto to the Labour one decide not to back him?

It’s
not my only doubt about him and his party.
Leaving aside the question of Trident renewal, there are a number of
other issues which concern me, of which I’ll mention just two.

Whilst
I think that his approach to negotiation over Brexit is more likely to result
in a deal of some sort than the petulant and hostile stance of someone who
seems to believe that she has an entitlement to expect everyone else to cave
in, Corbyn, like May, has already ruled out continued freedom of movement. So whilst he’s less likely to see the UK
crashing out with no deal of any sort, he’s unlikely to get a deal which goes
much beyond some sort of transitional arrangements. It’s hardly inspiring – and he, like May, has
already ruled out putting the final terms back to the people, regardless of the
state of public opinion at the time.

And my second major reservation about Corbyn is that he seems to have an
inexplicable blind spot when it comes to Wales and Scotland. Here is a man who supports the goal of an
independent and united Ireland, who supports movements for freedom and democracy
across the globe, yet seems to be incapable of coming to terms with the idea
that there are people in Scotland – and to a lesser extent in Wales – who want
to enjoy the same type of freedom. I
really do not understand why he is so unable to grasp the parallel.

Tuesday, 6 June 2017

The battering
which Corbyn has taken throughout the election campaign on the question of
Trident has been a sad reflection on the state of politics. It’s an issue on which he has been utterly
consistent for the whole of his political life, but seeing interviewers trying
to bully him to say that he’s changed his mind when he very clearly has not
done so has been a depressing exhibition of the power of the media to create
and sustain the Tory narrative. He’s
handicapped, of course, by the lack of support for his viewpoint within his own
party, particularly from those unions who seem to see preparing for nuclear
annihilation as just an expensive job creation scheme, but refusing to change
his mind, or even just pretend that he’s changed his mind to please a
particular audience, is surely a sign of strength and conviction rather than
the weakness as which it’s been portrayed.

The
hounding of him on the issue during the Question Time non-debate left me
feeling that there’s something very wrong in a country where a gung-ho
willingness to incinerate millions by launching a first strike is deemed one of
the most important tests of leadership. It’s
about time someone challenged the established consensus on nuclear weapons, and
it’s a great pity that his own party has prevented Corbyn from doing that
effectively at an election for the first time in a generation.

It
also raises a question in my mind about the much-vaunted ‘British values’ which
the Prime Minister keeps banging on about.
In the light of recent events, she has quite rightly condemned those who
are prepared to strap on a suicide vest and go out and kill as many randomly
selected civilians as they can as being something which is completely contrary
to those values. But at the same time,
she tells us that being willing and ready to launch a nuclear strike which will
kill millions of randomly selected civilians (as well as probably being
suicidal for the UK if the target country itself possesses nuclear weapons) is
a key test of support for those same values.

Now
some will no doubt object to that comparison, and argue that the whole point of
having nuclear weapons is never to need to use them; that the very act of
possessing them acts as a deterrent. And
obviously, they can only be a deterrent if the ‘other side’ completely believes
that the PM of the day will be ready and willing to use them if the UK is
attacked or if he or she believes that the UK is in imminent danger of
attack. All of that is true, of course. But my point is simply this: a Prime Minister
who declares publicly and repeatedly that she is ready and willing to order the
deaths of millions of civilians – men, women, and children alike – is not in a particularly
good position to argue that attacking and killing civilians is somehow alien to her core values. Of course there
are differences of opinion about the circumstances in which it can be justified,
but having stated that there are indeed circumstances in which it’s not only
justified, but she’s willing to do it, she’s lost the argument about values and
principles. Corbyn, at least, is still in a position to argue on the basis of values and principles - May is not.

None
of this can or should be taken to provide any sort of excuse or pretext for
recent attacks, but ridding humanity of its propensity to resort to extreme
violence isn’t a problem restricted only to ‘others’. The UK’s continued possession of nuclear
weapons is a clear and unequivocal statement of a willingness to use them, and thus
is itself a provocative act. And it’s
the sort of act which tells us more about the true values of our political
leaders than any amount of rhetoric ever can.

Monday, 5 June 2017

One
of the latest lines to come from the Tories has been the suggestion that Jeremy
Corbyn believes that there is a ‘magic money tree’ somewhere. This tree, they claim, is the only possible
source of all the money he needs to pay for his election promises. It’s actually a good line, and plays well to
the idea that the government, like the average household, needs to raise money
before it can spend it. It’s also
complete and utter nonsense. There
really is a magic money tree; it’s called quantitative easing.

In
essence, QE is a process in which the central
bank creates new money out of thin air, and since QE started in 2009, the Bank
of England has created some £435 billion of new money. It has used this money to buy up government
bonds, effectively repaying government debt by giving money back to those who
loaned the money (the government now nominally owes the same money to the Bank
– which the government also owns…) leaving those people free to decide how to
re-invest the money which they’ve been repaid.
So governments can and do create money – and there’s no fixed limit on
how much they can create. Insofar as
there is a practical limit, it’s the point at which all that extra money starts
to cause inflation; a point which the UK has not yet reached, because of the
overall weak state (whatever the government may claim) of the UK economy.

The
bigger question is how that new money is used.
The idea behind the process was that the money would find its way into
the ‘real’ economy and boost investment and productivity, but using it to repay
debt by buying up bonds has merely put it into the hands of people who put it
back into other financial products (and some of it even got loaned back to the
government in new bonds). The effect of
this has been that very little of the money has actually reached the ‘real’
economy – most of it has ended up benefiting the richest 5%, according to an
estimate by the campaigning group Positive-Money. On their calculations, for every £ created by
the Bank of England, around 8p has made it into the everyday economy whilst the
rest has gone into the pockets of the wealthiest.

It
didn’t have to be this way, though – there’s no hard and fast rule which says
that newly created money can only be used to buy up government debt. The same money could have been used to invest
directly in new infrastructure – a proposal put forward by Corbyn in 2015, and
described as People’s Quantitative Easing. The idea is not without its problems, and is
supported by some economists and criticised by others, but Positive-Money
estimates that every £ used this way would generate around £2.80 worth of extra
economic activity. That means, of
course, that a much lower level of money creation would have a much greater
effect in terms of stimulating the economy.

In
criticising Corbyn for believing in a magic money tree, the Tories are
diverting attention from the fact that they already have one of which they are making extensive use, but are using it
to benefit the few not the many.

Friday, 2 June 2017

Yesterday,
the Prime Minister told us that she believes that the UK will become more
prosperous following Brexit. In the
simplistic terms in which it is stated, and treating the phrase ‘following
Brexit’ as a temporal rather than a causal expression with no specific date put
on the realisation of that outcome, I’d even agree. But it’s close to being a statement of the
obvious; given economic history, the trend line over the long term towards
increasing prosperity is clearly an upward one.
Regardless of what politicians do or say, the long term underlying trend
points in only one direction.

It’s
not answering the right question, though; like almost everything which the
Prime Minister prefaces with the words “I’m very clear about…”, it’s obfuscation
rather than an attempt to provide clarity.
The right question is not whether the UK is likely to be more prosperous
in the future than it is now; it is whether it will be more prosperous because
of Brexit than it would have been if Brexit didn’t happen. And the second question – probably of even
more significance – is how that prosperity is shared.

The
answer to the first is essentially unknowable over the long term. There are too many factors to be able to
predict accurately, and any predictions would be based on assumptions –
essentially guesses – as to what may happen.
I tend to the view that the longer term economic scenarios (Brexit vs no
Brexit) will converge; the argument was never primarily an economic one for
me. But in the short term, it seems
clear to me that growth in prosperity will falter. It may even reverse for a while, depending on
the terms of any deal - with ‘no deal’ causing the biggest short term problems. In the short term, any form of Brexit has
more economic downside than upside, and the Brexiteers would have been more
honest had they spelled that out from the outset. Whether it is really a case of ‘short term
pain for long term gain’ remains to be seen (they may be right, even if I’m not
convinced); but it’s a more honest position than claiming we’re on the way to
an immediate land of milk and honey.

The
bigger question is about how any increase in prosperity will be shared, both
geographically and demographically. Some
of the proposals which have emanated from the Brexit camp, such as deregulation
and seeking to become some sort of tax haven, carry very clear implications
that the disparity in wealth between the well-off and the less so will continue
to increase. And the suggestion that targeted
regional aid should be replaced by a pot of money for which regions could bid
suggests a move away from the EU policy of trying to spread wealth
geographically as well. Under such a
scenario, an ‘average’ increase in prosperity for the UK is unlikely to have
much impact here in Wales.

As
with so much of what May says, the most important part of what she said is what
she didn’t say. Not for nothing does she
avoid committing to any detail.

Thursday, 1 June 2017

One
of the slogans which the Prime Minister and other members of her party are
repeating ad nauseam is the one about no deal being better than a bad
deal. It seems to be quite popular with
a particular target audience - it’s just about the only line which got her any
applause in the non-debate with Corbyn a few days ago. It’s also one of the silliest things which
she’s said – so how come she’s getting away with it?

At
an irrational level, I suspect that it may be down to the fact that any
compromise in discussions with the EU27 may require some flexibility – for the
short term at least – on the question of freedom of movement, and for those who
are motivated first and foremost by a desire to keep out foreigners, the
economic price of no deal may well be outweighed by the dream of eliminating
immigration. On the other hand, those who are looking more
at the economic consequences may well be mindful of the ‘truth’ that it is important
in any negotiation that ‘the other side’ knows that if you can’t get a
satisfactory deal, then you’ll walk away.
Anyone who’s ever been involved in a commercial negotiation will
understand that – it’s precisely because it has a ring of truth about it that
it strikes a chord.

Context
is everything though. In a negotiation
to secure an improvement on the current situation which is beneficial to both
sides, it is an entirely rational position to take. In those circumstances, if the deal on the
table at the end of the day was not better than the current status quo, then
walking away with no deal would be a sensible thing to do. At that point, all existing arrangements
would simply prevail, and everything would carry on with no change. That would be the situation, for instance, if
the UK were currently outside the EU seeking entry.

The
problem is – and this is why it’s such a silly and simplistic attitude – that
that isn’t where we are. We’re not
negotiating for an improvement on our current situation – that was never going
to be a possibility. We’re negotiating
to mitigate the economic impact of a decision which we’ve already taken, and the
fall back is not simply to stay with the status quo, but to walk away with no
mitigation at all. May’s mantra amounts
to saying that ‘no mitigation is better than less mitigation than we want’. It’s utter nonsense, and no wonder that the
EU27 are scratching their heads in amazement.
If the negotiations fail, walking away does not simply mean that the
status quo continues; quite the reverse.
Walking away doesn’t take us back to where we were before we entered the
EU; it takes us somewhere entirely different.

The
UK Government has, it tells us, done little or no work on scoping out what ‘no
deal’ looks like, but we know that it means a reversion to WTO rules and
tariffs. We also know that it means a
lengthy period during which the UK has to renegotiate hundreds of deals and treaties with other countries. Since the rest of the EU can’t offer a worse
deal than WTO terms, even if it wanted to, I suspect that the very worst deal
which could emerge from any negotiations is an agreement on a transitional
period during which the UK can start to deal with the incredible amount of
detail which needs attention. The
attitude of May and her cabinet seems almost designed to deter the EU27 from
offering even that. Even the worst
conceivable deal – agreement on nothing other than a settlement of debts and a
transitional period – is always going to be better than no deal at all, but
they seem determined to create an excuse for walking away with nothing.

I’m
struggling to understand whether they know all this really, and are just
spinning a line in the hope of winning a few votes by sounding tough, or
whether they really believe what they’re saying. Perhaps sufficient UK electors may yet be
taken in, but I doubt that the EU leaders are going to be quite as gullible as
the crowd in that old cowboy film.